Off Market Deal Sourcing Strategies

[Josh Oaten]

What strategies have you used and succeeded with in sourcing off market deals for larger Multifamily properties (50 - 200 units) ?

[Wale Lawal]

@Josh Oaten

Finding off-market commercial real estate deals is not fundamentally different from sourcing listed deals, but there are a few tactics you can follow to find more opportunities. Generally, investors must be diligent in their outreach and communications, keeping their ears to the ground for deals that fit their profile.

1. Build Strong Broker Relationships

Buyers can find off-market commercial real estate deals and avoid commissions altogether when the right listings pop up organically, but brokers can also be a strong source of unlisted deals. Due to their expansive transactional networks, brokers are constantly in touch with owners seeking to sell, as well as other brokers. Beyond relationships, a broker’s extensive digital tool set can also pinpoint opportunities that are not formally listed.

As your firm continues to grow and transact in the market, the relationships you forge can carry significant value. Proving that your firm is not only positioned for growth, but prepared to execute, can go a long way. Brokers are incentivized by sales, meaning they will work diligently to find properties for interested buyers.

2. Forge Strong Industry Relationships

Beyond brokers, other industry relationships can also play a meaningful role in sourcing off-market deals. From contacts at other firms, to contractors, title companies, property managers, and legal or environmental teams that might work with sellers, staying in touch can prove beneficial.

3. Property Websites & Area Building Databases

By definition, they won’t be publicly listed on the most popular listing services, but it’s possible to find off-market commercial real estate deals on other listing websites like Zillow. Even if properties are not designated as “for sale”, these databases might hold the most recent sale date, price, square footage, and other essential details. While not necessarily a scalable tactic for institutional investors, this is another way to find commercial real estate deals off-market.

4. Contacting Owners Directly

It’s not uncommon for real estate investors to notice appealing buildings, reach out to owners and make an offer. Depending on the markets you’re investing in, this may or may not be a viable strategy. Because this approach hinges on another’s approval, it might be more effective for owner/operators than institutional investors, who tend to be more calculated and systematic in their timing. Some owners might entertain the idea, but it’s also important to note that not all owners are in the market to sell, making rejections relatively likely.

5. Direct Mail

Unlike online research and cold calling, sending direct mail to properties owners whose buildings meet your criteria can cast a wider net. For this reason, direct mail is the most scalable of these three outreach strategies. Because marketing companies can shoulder the burden of printing and distributing these mail pieces, the hard work lies in building targeted lists.

All the best!